Tax Highlights from the 2025 Saskatchewan Budget

Highlights from the Saskatchewan  Budget

Minister of Finance Jim Reiter tabled the 2025/26 Saskatchewan provincial budget on March 19, 2025.

The budget projects a $12.2 million surplus for the upcoming 2025/26 fiscal year, $75.8 million for 2026/27 and $143.9 for 2027/28. The forecast deficit for the nearly completed 2024/25 fiscal year now stands at $660.6 million, compared to the initially projected $273.2 million deficit. The province’s real GDP is projected to grow by 1.8% in 2025 and 2% in 2026.

On the income tax front, there are no changes to personal or corporate income tax rates for 2025. However, the budget permanently maintains the small business tax rate at the current 1% rate, increases various personal tax credits and introduces a new fertility treatment tax credit.

The following pages summarize the changes announced in the budget. Please note that these changes remain proposals until they are passed into law by the provincial government.

Personal Tax Matters

Personal Income Tax Rates and Tax Brackets

There are no proposed changes to personal income tax rates. However, tax brackets and other amounts have been indexed by 2.7% to account for inflation. The table below outlines Saskatchewan’s tax rates and tax brackets for 2025.

The table below outlines the 2025 combined federal and provincial highest marginal tax rates for various types of income.

Basic Personal Income Tax Credits

The budget proposes to increase the basic personal exemption, spousal and equivalent-to-spouse exemption, dependent child exemption, and senior supplementary amounts by $500 in each of the next four taxation years (2025, 2026, 2027, and 2028). These increases are in addition to the annual indexation adjustments for these credit amounts.

Disability and Caregiver Tax Credits

The Disability Tax Credit, Disability Tax Credit Supplement (for persons under 18), Caregiver Tax Credit, and Infirm Dependent Tax Credit amounts will increase by 25% in the 2025 taxation year, in addition to the standard indexation adjustments for these credits.

Saskatchewan Low-Income Tax Credit

To provide additional relief to Saskatchewan residents with low and modest incomes, the Saskatchewan Low-Income Tax Credit will be enhanced by 5% per year over the next four years.

Effective July 1, 2025, the Saskatchewan Low-Income Tax Credit benefits will be as follows:

• The maximum annual benefit for a single adult will increase from $398 to $429. By July 1, 2028, the annual maximum benefit is projected to reach $527.
• For a married couple with no children or a senior couple, the 2024 amount of $796 will increase to $858 in 2025, with a forecasted increase to $1,054 by 2028.
• The child component will increase from $157 to $169 per child, with a maximum of $338 per family. For a family of four, the 2024 total maximum annual benefit of $1,110 will increase to $1,196 in 2025 and is projected to grow to $1,469 by 2028.

These increases are in addition to the annual indexation.

Active Families Benefit

The benefit amount and eligible income threshold for the Active Families Benefit both doubled on January 1, 2025, making children’s sports, arts, cultural, and recreational activities more affordable.

The enhancement doubles the refundable tax credit from $150 to $300 per child. For a child with a disability, the benefit doubles from $200 to $400 per child. The eligible family income threshold has also doubled from $60,000 to $120,000, allowing more families to claim the benefit.

First-Time Homebuyers’ Tax Credit

The budget introduces an increase to the Saskatchewan First-Time Homebuyers’ Tax Credit from $10,000 to $15,000 for eligible home purchases, effective October 1, 2024. This will increase the maximum benefit for an individual from $1,050 to $1,575.

Fertility Treatment Tax Credit

To improve fertility affordability, a new Fertility Treatment Tax Credit was introduced retroactive to January 1, 2025.

The program provides a 50% refundable tax credit for one lifetime fertility treatment expense claim per tax filer. Eligible expenses include related prescription drug costs for approved treatments and costs incurred in Saskatchewan. The maximum amount of eligible expenses that can be claimed is $20,000, resulting in a refund of up to $10,000 per eligible claimant.

Eligible expenses can be claimed on a one-time-only basis over any rolling 12-month period, ending in the taxation year. Individuals may also continue to claim all eligible medical expenses under the Medical Expense Tax Credit without a clawback under the Fertility Treatment Tax Credit.

Home Renovation Tax Credit

The budget reinstates the Home Renovation Tax Credit, allowing homeowners to save up to $420 annually on home renovation expenses, while seniors undertaking home renovations can save up to $525 annually. This tax credit is permanent, effective October 1, 2024.

Corporate Tax Matters

Corporate income tax rates

There are no proposed changes to corporate income tax rates. The table below outlines Saskatchewan’s tax rates and small business limit for 2025.

The table below outlines the 2025 combined federal and provincial corporate income tax rates for various types of income earned by a Canadian Controlled Private Corporation (CCPC).

Maintaining The Small Business Tax Rate

The budget confirms that the small business tax rate will remain at 1% instead of reverting to 2% on July 1, as originally planned.

Small and Medium Enterprise Investment Tax Credit

Effective July 1, 2025, the Small and Medium Enterprise Investment Tax Credit will provide a non-refundable tax credit equal to 45% of equity investment by qualified individuals or corporations in an eligible small and medium-sized enterprise (SME).

An eligible SME is defined as a Saskatchewan-based business with five to 49 employees, with at least 50% of those employees residing in Saskatchewan. These enterprises must operate in either the food and beverage manufacturing sector or the machinery and transportation equipment manufacturing sector. Under the program, eligible businesses can raise up to $4 million in qualifying investments.

The Small and Medium Enterprise Investment Tax Credit has an annual cap of $7 million on total non-refundable tax credits, awarded on a first-come, first-served basis. To qualify, corporations must make a minimum equity investment of $50,000, while individuals must invest at least $25,000. Investments must be held for a minimum of three years to be eligible. Investors can earn a maximum of $225,000 in tax credits per annual investment and claim up to $140,000 per eligible equity investment per year. Any unused tax credits can be carried forward for up to seven years.

Saskatchewan Commercial Innovation Incentive

The budget provides a two-year extension of the new application acceptance period, moving the deadline to June 30, 2027. As part of this extension, the scientific/technology test threshold will be reduced, and the requirement to demonstrate new economic benefits to Saskatchewan will be eliminated. These changes aim to reduce red tape, encourage greater participation in the program, and streamline the application process. By removing barriers and simplifying requirements, the province seeks to expand program uptake and expedite the process for successful applicants to claim the program’s tax reduction benefits.

Low Productivity and Reactivation Oil Well Program

The budget introduces the Low Productivity and Reactivation Oil Well Program, which provides a Crown royalty and freehold production tax volumetric drilling incentive for low-producing, suspended, or inactive wells. The program is designed to encourage revitalization efforts by offering incentives for the drilling of new horizontal sections in existing wells. This approach is expected to maximize reservoir recovery rates and increase overall production efficiency.

The Low Productivity and Reactivation Oil Well Program will be applicable to new horizontal sections drilled on existing low- productivity, suspended, and inactive horizontal wells between April 1, 2025, to March 31, 2029.

Oil Infrastructure Investment Program

The budget announces a four-year extension of the new application acceptance period, pushing the deadline to March 31, 2029. Additionally, the timeframe for royalty credits to be claimed for completed projects will be extended from 2035 to 2040.

Other Initiatives

Provincial Sales Tax (PST) Rebate for New Home Construction

To better support the housing sector and make new home purchases more affordable, the PST Rebate for New Home Construction will become permanent. The rebate provides up to 42% of the PST paid on the purchase of a new, previously unoccupied home. The now-permanent program is available for newly constructed homes with a total price of less than $550,000, before taxes and excluding the value of the land, furniture, furnishings, and appliances.

Graduate Retention Program

The budget increases the Graduate Retention Program’s maximum tax credit benefits by 20% to $24,000 to help ensure more post-secondary students – who graduate on or after October 1, 2024 – stay, live, and work in Saskatchewan.

Education Property Tax Mill Rates

The budget introduces changes to education property tax mill rates to offset the increase in property assessment values across all property classes, effective January 1, 2025. The mill rates for each property class will decrease, ensuring that total provincial education property tax revenue remains unchanged from 2024/25, aside from base growth due to new property construction.

The 2025 education property tax mill rates for the four property classes will be adjusted as follows:

• Agriculture: The 2024 rate of 1.42 will be reduced to 1.07 for 2025.
• Residential: The 2024 rate of 4.54 will be reduced to 4.27 for 2025.
• Commercial/Industrial: The 2024 rate of 6.86 will be reduced to 6.37 for 2025.
• Resource: The 2024 rate of 9.88 will be reduced to 7.49 for 2025.

PST On Vapour Products

Effective June 1, 2025, the PST base will be expanded to include the sale of all vapour liquids, products, and devices. This change aims to maintain tax equity across different products and discourage vapour products from becoming more attractive to youth and non-smokers.

Taxation of Electric Vehicles

The budget increases the annual Road Use Charge from $150 to $300 to better reflect the costs of road maintenance and ensure owners of electrical vehicles pay an amount more comparable to owners of traditional vehicles. The new annual rate will take effect on June 1, 2025.

We Can Help

Your financial advisor can help you assess the impact of these proposals on your personal finances or business affairs and show you ways to take advantage of their benefits or ease their impact.

To open this article in a shareable format, click here.